The Business Grower
What are your expectations when you sell your business idea to a venture capital firm for a business loan
? What about when you look for a venture capital firm for investment purposes? While both aspects may seem pretty self-explanatory, theres more to both than they appear to be.
A venture capital firm is actually a company made up of a number of businessmen and investors looking for upcoming and small entrepreneurs to invest their money on. Often referred to as private equity investors, this group of people are always on the lookout for brilliant business ideas and pitch-ins, which will give them a substantial amount of return in their investments at the soonest possible time.
When you approach a venture capital firm for whatever purpose you might have, you need to always prepare yourself before you meet them up. If youre someone who would like to offer an investment, then you need to consider how much money youre willing to invest and how soon would you like to get the profit out of it. Of course there will be risk involved as in a typical investment portfolio and to gauge this risk with a certain venture capital firm, you need to setup a meeting with their investors.
One of the truths in the business market is how the risk is directly proportional to ones investment and return of investment as well. The larger the money you are willing to invest, the bigger the risk will be. The bigger the risk is, the larger the probable return on investment you can receive. The financial asset of these venture capital firms goes into the
early stage capital of several small businesses and hence, your expected return will be largely dependent on how successful is the operation of that small business venture.
As one of the
small business investors, you need to convince these business owners that you are interested in their business portfolio and youre willing to give a huge amount of money as a startup investment in their business venture firm. Members of a venture capital firm have well-guarded trade secrets and if they find you trustworthy enough, they may very well treat you as one in the league.
As an entrepreneur, on the other hand, you need to sell them your business idea convincingly enough so as to invest money for your early stage capital. Oftentimes, a great business idea will be picked by reliable venture capital firms and theyd even fund a hundred percent of your startup funds right there and then. Of course they will be partaking some of your profits but given the financial circumstance, thats the most sensible thing to do.
by: george moran
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